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Fundamental Payroll Certification Question and Answers

Fundamental Payroll Certification

Last Update Nov 30, 2025
Total Questions : 145

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Questions 1

The types of accounts used by businesses to classify transactions are:

Options:

A.  

Asset, Expense, Revenue, Inventory, and Equity

B.  

Asset, Liability, Expense, Revenue, and Equity

C.  

Inventory, Revenue, Equity, and Cash

D.  

Revenue, Expense, Cash, and Net Income

Discussion 0
Questions 2

Which of the following statements is TRUE regarding the pre-notification process?

Options:

A.  

Sent at least five days prior to payday

B.  

Required prior to direct deposit beginning

C.  

Verifies the employee's name is on the bank account

D.  

Involves sending a zero-dollar transaction through ACH

Discussion 0
Questions 3

To ensure net pay is correct and taxes are deposited timely, which items need to be reconciled?

Options:

A.  

General ledger accounts and payroll register only

B.  

Accounts payable payments and end-of-the-month balances only

C.  

Accounts payable end-of-the-month balances and general ledger accounts

D.  

Accounts payable payments and end-of-the-month balances; general ledger entries and payroll register

Discussion 0
Questions 4

Where should a firm’s business transactions FIRST be recorded?

Options:

A.  

Balance Sheet

B.  

General Ledger

C.  

Journal

D.  

Trial Balance

Discussion 0
Questions 5

All of the following objectives are included in the operations of a Payroll DepartmentEXCEPT:

Options:

A.  

Accurate tax reporting

B.  

Cost savings

C.  

Giving tax advice

D.  

Reporting to management

Discussion 0
Questions 6

An employee receives a total of $200.10 in cash tips in July. Determine the latest date the employee MUST report tip income to the employer.

Options:

A.  

August 10

B.  

September 10

C.  

September 30

D.  

December 31

Discussion 0
Questions 7

Which of the following statements about payments made under workers' compensation benefits is FALSE?

Options:

A.  

They are not included in the employee's gross income

B.  

They are received for injuries or illnesses suffered on the job

C.  

They are subject to FUTA if they do not exceed the employee's benefits

D.  

They are not subject to FICA if payments are made under state regulations

Discussion 0
Questions 8

A company has engaged an individual to write a sales contract. The individual receives a flat amount for the task and has an assigned time frame for completion. This individual is classified as a(n):

Options:

A.  

Leased Employee

B.  

Administrative Employee

C.  

Independent Contractor

D.  

Commissioned Salesperson

Discussion 0
Questions 9

The DOL can issue fines for all the following violations EXCEPT:

Options:

A.  

Overtime

B.  

Sick Leave

C.  

Child Labor

D.  

Minimum Wage

Discussion 0
Questions 10

Under the FMLA, employers MUST maintain related leave records for how many years?

Options:

A.  

1

B.  

3

C.  

4

D.  

5

Discussion 0
Questions 11

What is the purpose of the ACA legislation?

Options:

A.  

Financial reform

B.  

Healthcare reform

C.  

Income tax reduction

D.  

Supplemental tax increase

Discussion 0
Questions 12

IRS regulations require employers to take all of the following actions for taxable noncash awards EXCEPT:

Options:

A.  

Gross up the value of the award

B.  

Tax the value of the award when received

C.  

Recognize the value of the award as a business expense

D.  

Include the value of the award on Form W-2 in Boxes 1, 3, and 5

Discussion 0
Questions 13

Which of the following record-keeping storage methods does NOT offer increased confidentiality?

Options:

A.  

Paper

B.  

Cloud

C.  

Micromedia

D.  

Media imaging

Discussion 0
Questions 14

What information is reported to the IRS on Form 1094-C?

Options:

A.  

Basic employer information and number of employees

B.  

Employee FITW

C.  

FUTA wages

D.  

Payments made to the beneficiary of a deceased employee

Discussion 0
Questions 15

The purpose of the prenotification process for direct deposit is to ensure that the transaction is:

Options:

A.  

Authorized by the company

B.  

Authorized by the employee

C.  

Acceptable to the receiving bank

D.  

Acceptable to the originating financial institution

Discussion 0
Questions 16

When resolving late deposits, the payroll staff should take all of the following steps EXCEPT:

Options:

A.  

Check to see if the financial institution is having an internal problem.

B.  

Tell the employee the deposit is not considered late until midnight the day of payday.

C.  

Verify the employee provided the correct routing and account numbers for any direct deposits.

D.  

Ask the employee if they checked the deposit via an ATM, spoke with an actual bank representative, or checked online banking.

Discussion 0
Questions 17

The reconciliation of an employee federal income tax withholding account occurs when which type of account is balanced?

Options:

A.  

Asset

B.  

Equity

C.  

Expense

D.  

Liability

Discussion 0
Questions 18

The due date for filing Form 941 is the:

Options:

A.  

Last day of the current quarter

B.  

15th of the month following the end of the quarter

C.  

Last day of the month following the end of the quarter

D.  

First day of the month following the end of the quarter

Discussion 0
Questions 19

To optimize customer service, policies should include attributes which are:

Options:

A.  

Reliable

B.  

Fluctuating

C.  

Interchangeable

D.  

Intangible

Discussion 0
Questions 20

Which of the following expenses is a non-operating expense?

Options:

A.  

Insurance

B.  

Interest paid on income taxes

C.  

Legal fees

D.  

Utilities

Discussion 0
Questions 21

When an information return is filed after August 1st of the same year, the penalty amount per form is:

Options:

A.  

$60.00

B.  

$120.00

C.  

$310.00

D.  

$630.00

Discussion 0
Questions 22

Which of the following documents listed on Form I-9 can be used to establish both an employee's identity and employment eligibility?

Options:

A.  

Social Security Card

B.  

U.S. Passport

C.  

Voter’s Registration Card

D.  

Driver’s License

Discussion 0
Questions 23

The best practice is to start the annual reconciliation after the:

Options:

A.  

W-2 audit is complete

B.  

End of the first quarter

C.  

End of the calendar year

D.  

First payroll of the current year

Discussion 0
Questions 24

Using the following information, calculate the social security tax to be withheld.

Options:

A.  

$138.45

B.  

$141.47

C.  

$160.58

D.  

$202.60

Discussion 0
Questions 25

Based on the following Section 125 Cafeteria Plan contributions, calculate the employee’sbiweekly deductions.

Options:

A.  

$69.61

B.  

$75.42

C.  

$77.69

D.  

$82.92

Discussion 0
Questions 26

Based on the following information, calculate the employee's gross wages for the workweek under the FLSA.

Options:

A.  

$692.50

B.  

$742.50

C.  

$810.00

D.  

$825.00

Discussion 0
Questions 27

Which organization should be contacted when placing a stop payment on a check?

Options:

A.  

FDIC

B.  

NACHA

C.  

ODFI

D.  

RDFI

Discussion 0
Questions 28

All of the following standards demonstrate effective communication techniques EXCEPT:

Options:

A.  

Empathy.

B.  

Listening.

C.  

Feedback.

D.  

Measurability.

Discussion 0
Questions 29

Using the wage bracket method, calculate the employee’s net pay. The employee’s W-4 was completed in 2019 or earlier.

Options:

A.  

$589.70

B.  

$651.45

C.  

$685.45

D.  

$686.45

Discussion 0
Questions 30

Which of the following deductions from pay is considered a voluntary deduction?

Options:

A.  

Garnishments

B.  

Wage assignments

C.  

Wage attachments

D.  

Medical support orders

Discussion 0
Questions 31

Employee privacy rights are NOT governed by:

Options:

A.  

Company policy

B.  

Federal law

C.  

FLSA

D.  

State regulations

Discussion 0
Questions 32

Which of the following account types has a normal debit balance?

Options:

A.  

Asset

B.  

Capital

C.  

Liability

D.  

Revenue

Discussion 0
Questions 33

Using the wage bracket method and the information below, calculate the employee's weekly net pay.

Options:

A.  

$230.40

B.  

$244.99

C.  

$246.90

D.  

$259.99

Discussion 0
Questions 34

To identify an out-of-balance general ledger account, all of the following documents should be used EXCEPT:

Options:

A.  

General Ledger Account Details

B.  

Bank Account Statements

C.  

Payroll Register Totals

D.  

Copies of Paychecks

Discussion 0
Questions 35

All of the following plans are deferred compensation plans EXCEPT:

Options:

A.  

401(k)

B.  

403(b)

C.  

457(b)

D.  

501(c)

Discussion 0
Questions 36

Report backup withholding to the IRS using:

Options:

A.  

Form W-9

B.  

Form W-2

C.  

Form 945

D.  

Form 941

Discussion 0
Questions 37

Even if a worker meets the definition of an employee, an employer can still treat the worker as an independent contractor if the worker passes the:

Options:

A.  

Common Law Test

B.  

Reasonable Basis Test

C.  

Physical Presence Test

D.  

Permanent Resident Test

Discussion 0
Questions 38

Payroll staff should be aware of all of the following potential warning signs of a data breach EXCEPT:

Options:

A.  

Excessive system security reset requests

B.  

Requests for large amounts of payroll data

C.  

An employee email request for a reprinted W-2 form

D.  

Payroll system activity occurring outside normal work hours

Discussion 0
Questions 39

When an employer engages with a leasing company to lease an employee, the employer does NOT:

Options:

A.  

Hire and fire

B.  

Report wages

C.  

Set rate of pay

D.  

Supervise the work

Discussion 0
Questions 40

When testing a payroll business continuity plan, all of the following tasks are critical to issuing payments to employees EXCEPT:

Options:

A.  

Validating system access.

B.  

Adding a new cost center.

C.  

Creating the ACH file.

D.  

Printing paychecks.

Discussion 0
Questions 41

The withholding of federal income tax is regulated by the:

Options:

A.  

ACA

B.  

IRC

C.  

FICA

D.  

FUTA

Discussion 0
Questions 42

Which of the following forms of identification CANNOT be used in Section 2 of Form I-9?

Options:

A.  

Driver’s license

B.  

Employee badge

C.  

School ID card with photo

D.  

Voter’s registration card

Discussion 0
Questions 43

The journal is commonly referred to as the record of:

Options:

A.  

Cross-reference

B.  

Final entry

C.  

Original entry

D.  

Secondary entry

Discussion 0